Author Archives: evcricket

About evcricket

Extreme gardener, engineer and bird nerd.

Is nuclear a good investment?

In the much belated follow up to the eligibility criteria post on nuclear power, I consider the first merit criterion; is nuclear power a good investment? Is building a nuclear power plant a good way to turn a pile of money into a bigger pile? Or are there better ways of doing that?

Imagine you’ve been saving for a while and you have $50 billion burning a hole in your pocket and want to invest it in some clean electricity production. Nuclear looks okay, people keep telling you it’s clean and reliable, and everyone in the neighbourhood seems to have solar now as well, so might look at that too.

There’s a bit to consider; nuclear takes a long time to build, but once it’s running it produces electricity almost all the time. Solar is very quick to build, but only produces power when the sun shines. Which will give you more electricity from your investment?

In the first post I assumed an 8-year construction schedule, the Nuclear Energy Agency allows 4-8 years depending on where you are, and excluding permitting, finance raising and design. As this would be the first ever nuclear power plant built in Australia I think ten years is reasonable. It’s taken Hinkley Point, with full government support, at least two years to even decide if they’re going to build it and they’re expecting electricity in 2022 or so.

$50b is about the expected cost for the Hinkley Point reactor. For that price you get 3200MW, provided by two steam turbines. These will generate power almost all the time, for a modeled capacity factor of 85%. This might be a touch low, but it doesn’t make much difference in the model; the US hit about 91% capacity factor last year, a record, and their long term average is around 90%. France in comparison was closer to 80%, but nuclear makes up a much higher proportion of generation in France, so has to ramp up and down to follow the load. The construction period is about ten years, so construction costs are around $5b each year.

How much solar would that buy? I’ve been using $2/Watt as an estimate for about 18 months, and it’s probably a bit high now for rooftop where the installation market is very competitive. I’ve seen commercial systems go in recently at $1.1 – $1.4/Watt, but they have all been on flat rooftops. If you spend $5b a year on solar it will require more space than some factory roofs, so the cost of installing in a field is more accurate. These tend closer to $2.4/Watt, which is what I’ve modeled.

Solar’s capacity factor is quite easily determined using climate data, driven by maps like this from  the Bureau of Meteorology. Find the insolation, multiply it by the panel efficiency and it’s possible to calculate the average energy output per kW. Like this table. For the model I have assumed 4kWh/kW/day, slightly more than Sydney’s average, but a lot less than Brisbane, Cairns and Alice Springs. 4kWh/kW per day is an implied capacity factor of 17%.

Solar is much easier to build. Australia has been adding about 800MW each year for the last 5 years, without really trying. At $2.40/Watt, $5b will buy a touch over 2GW of capacity. That represents a pretty big increase in current installation rates, so maybe 2GW in the first year is a bit ambitious. If this were an actual 10-year program then your installation capabilities would ramp up and should easily install 2GW/year by the third or fourth. I have modeled a constant program of 2GW per year to keep it simple. Again this doesn’t make much difference to the result.

I also haven’t modeled any change in the price of solar, which is extremely generous to nuclear. Installed prices have roughly halved in the last 5-years, continuing the trend of the last 40-years. It would be quite reasonable to assume that the cost of solar would halve again during this period.

The price of nuclear hopefully doesn’t change during the build, although these plants have a bad record of hitting their construction quotes and timelines. This excellent article in Grist gives a summary of some studies into power projects and how often they run over time and budget. Nuclear is the worst, on average being more than 100% over budget, and almost 100% of projects running over time. Of generating technologies, solar is the most reliable, with average cost overrun of less than 10%, with 40% of projects running over schedule.

First the graph of capacity over time. Solar installs just over 2GW a year, nuclear installs nothing for ten years. This is just peak output though, nuclear can provide that around 90% of the time, solar less than 20%.

.Capacity

The interaction between capacity and capacity factor are shown in the annual output graph. Solar’s output increases each year for the first ten as new capacity is added, then decays over time as the panels degrade. I’ve modeled 1% reduction in capacity each year. Nuclear generates nothing for ten years, then 3200MW forever. Degrading at 1% solar’s annual output falls to match nuclear’s some time after year 30. The solar array would have replaced some panels and inverters by this time, but many of the original panels would still be working.

Annual MWh

Solar gets a massive headstart through easy construction and modular design, which theoretically generates electricity from day 1. Even with the panels degrading and nuclear power’s famous high capacity factor, it doesn’t generate as much electricity as solar until about 80 years into this scenario.

Cumulative generation

I’ve just realised that I graphed Year in all three. MWh 

There’s a gentle curve in solar as the panels wear over time, but in anything less than a 50-year investment solar is going to make more electricity per dollar than nuclear, by some margin. Solar provides returns much faster and with much lower risk than nuclear, with the strong chance that construction will get cheaper throughout a program, rather than more expensive. The numbers used above are extremely favourable for nuclear, assuming that the nuclear project will be delivered on time and on budget, which is demonstrably unlikely, and assuming that solar will not experience any cost improvement, despite doing the same thing every year for ten years, with a product demonstrated to lower its manufactured price over time. Nuclear produces nowhere near as much electricity as solar on conservative estimates and it’s only going to get worse.

The absurd complexity in manufacture and design of nuclear power plants is a weakness that leads to severe cost and timeline uncertainty, while the opposite is true of solar. No one will build a nuclear power plant in Australia without significant government intervention. And it won’t just require money, but the political stamina to commit to a project of staggering cost and no discernible output for over a decade. It won’t happen. Nuclear has already lost.


Rational Gold-Plating

Much has been written and spoken about electricity prices, particularly the role of network prices in driving up household bills. I’ll admit I haven’t listened to this Background Briefing, but there is one point I have wanted to discuss for a while:

Federal Treasury estimates that 51 per cent of an average household bill is spent on network costs. Most of that is going towards paying off the $45 billion network companies have spent on updating our poles and wires over the last five years.

The definitive work on electricity pricing is the Australian Energy Market Commission’s 2013 Electricity Price TrendsFrom page ii onwards gives a good summary of the biggest price drivers in the last 12 to 24 months. Yes the various ‘green’ schemes have an impact, making up 17% of the average bill. These include legacy solar feed-in-tariffs, which look incredibly generous in hindsight. I think there are some houses in the ACT and Queensland still getting 60c/kWh, where at the moment about 20c/kWh will give you a 10-year payback. The carbon price contributed about 10%, the RET a bit less, and then the state efficiency schemes even less.

The real action is in network prices, making up almost exactly half of the average residential bill. This has risen in the order of 40% in the last few years, driven by the network investments. The question for today then is “Are network operators trying to rip us off?”

I have heard in a number of places now the charge that network companies are cynically using the network investment return rules; that when they build new networks they can claim a 10% return on investment through power prices. Network businesses are state owned or regulated, so the amount they can charge is regulated by a central agency, like IPART in NSW. The allegation at the centre of the Gold Plating charge is that knowing these rules and wanting to make money, the networks built unnecessarily large infrastructure. The Background Briefing cited above claims this is demonstrated by unused or oversized infrastructure, like substations that aren’t being used. This doesn’t look great, but I argue this isn’t as sinister as it appears and that network companies are making rational business decisions. Two things drive this; the time it takes to make investment and infrastructure decisions and the fixed costs associated with upgrades.

In 2006-7 I was working for Sydney Water, a massive electricity user in NSW. About 1% of state demand, or 2% if the desalination plant is running. During this time I was in meetings with the network provider about upgrades to the Sydney ring main. The ring main is the circuit of wires under Sydney that powers everything. It’s all underground, under roads and under buildings. Upgrading it is a big job, and it was going to happen one day. Wires can only carry so much current, and at some stage they must be upgraded as demand in the city grows. That time was coming and planning was well underway. So these meetings were going from about 2005 until the project finished in around 2012, about 7-years worth of planning. The result is a $400m or so project that greatly increased the capacity of the main and improved its reliability. If you’re interested I’m pretty sure the solid grey building near the light rail and Bellevue park near Central is the new substation associated with this project. Planning electricity upgrades takes a long time because it is a massive job.

So in 2006 they were nearing capacity of the network and wondering what to do about it. This conversation was being had all over the network; the initial build outs of the 70s and 80s were reaching capacity and needed to be replaced.

Considering the Sydney example again, how are the costs apportioned in a big job like this? I don’t know the specifics, but in smaller projects I’ve worked on, getting staff to site, foundation work, meetings and the big one, closing roads to do the work, can take up as much as 80% of the total cost. These are the fixed costs. It doesn’t matter what capacity you install, these costs are the same. The network infrastructure is 20%. Since it’s such a massive job just showing up, you might as well put the biggest cable you can in the hole. Even if you double the carrying capacity of the infrastructure, that only increases the project cost by 20%. This means there is a very strong technical incentive to oversize the infrastructure as it avoids those fixed costs.

Compounding this, how do you decide how big to make a network anyway? Residents don’t call the network provider and tell them they’re thinking of doubling their load with a new air conditioner and to some degree neither do industrial customers. The rational thing is to observe trends and make a guess. And the trends in electricity use in the National Electricity Market have side swiped virtually everyone.

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This graph from The Conversation tells the story. If you were making electricity decisions in 2007 the data says electricity use grows every year, for almost the last 30 years (this trend goes back a long time). I did not see anyone, anywhere, predict the decline in electricity use that happened from 2009. Even two years into the decline the market operator was forecasting growth in the following years. Now though we have just finished the 4th straight year of declining electricity use.

Put all this together; it is a massive job upgrading electricity infrastructure, requiring disruption to supply, holes under roads and co-ordination of dozens of stakeholders. Of the cost of upgrading, a small component is impacted by deciding to go large, so network companies upgrade based on a 20-year forecast. The previous 20 years showed unrelenting growth and no one predicted the slide. What would you do? Exactly what the network companies did. Mitigate fixed costs by upgrading massively when you have to and assume the trend of the last 20 years is going to continue. The greatest risk then is an oversized network and increased cost; the greatest risk of an undersized network is blackouts, political tension and increased costs as the fixes are done urgently.

So I argue; network businesses made rational decisions with the information available to them. I agree there is an incentive to oversize based on the infrastructure return-on-investment rules, but this is dwarfed by the incentive to build big networks when you have to. Given the networks are state regulated there is good argument to reign in those investment rules, but I don’t think it would make much difference. Network businesses are large, unwieldy and rightly conservative organisations. As a result, we have some of the best electricity supply certainty in the world.

What can a consumer do about rising network prices? Leave the network. And the more people leave the greater the incentive for those remaining to go as network costs fall to a smaller customer base. This is something I am *very* interested in at the moment and can’t wait to see what happens.


A letter to the Federal LNP

I got angry about climate change again this week, in particular this stunt by NSW Liberal MPs. With my blood up after my first coffee for the day I wrote the below and sent it off. Maybe there are some points in there you’d like to take to your local members? Politics aside, the ACT’s response to climate change is the most appropriate in the country. It only appears radical because everyone else, particularly federal politicians, are doing so little.

 

Good morning Ms Goward,

I note with disappointment your media event and associated opposition to the ACT’s ambitious renewable energy plan. Two things in particular are disappointing and I would have thought below you. First, the idea that electricity should be produced in the region it is consumed, or any other product for that matter, is absurd and not how we have ever operated. Do the people of Lithgow complain about hosting our power plants? Do you drive out there and apologise from time to time? Do you feel guilt that the cheap power that has driven our economy is killing the residents of Morwell? A functioning economy has always depended on distributing costs and benefits and electricity generation is no different.

What I am most disappointed about though is the argument against the ACT’s principled stand. It appears from the article in the Canberra Times that you said “Ninety per cent by 2020 is really quite outrageous – it’s pandering totally to a green movement. It’s unrealistic, it’s impractical and wind turbines are notoriously unreliable as well.” This amounts to you asking the ACT to stop being ambitious. Their action is making you and the laggards in the LNP look bad. Rather then try and work harder on your own response you try and bring others down. It is disgusting and will be viewed with utter contempt in years to come.

You have an opportunity to do the right thing by your electorate and their children, by being ambitious and taking action. Yet you choose to bring others down instead. Party unity is one thing, doing the right thing something else entirely.

Why not think about the jobs in your region? Or the health benefits that come from reducing coal use and mining? The Goulburn region has a stunning wind resource, that can bring jobs and money to the region. While climate change ruins farms and rain patterns, you choose to do nothing and stand in the way of a new income stream for these properties.

I hope you change your mind and support the most ambitious and appropriate government response to climate change in Australia at the moment. I have not read a report yet that thinks Direct Action will work, and there are no penalties if it doesn’t. If you are serious about addressing climate change you can stand up and say something. If you are not, history will judge you very harshly.

I am available to speak further about this on [mobile number] and happy to discuss more appropriate policy responses to climate change if you desire.

Regards,
Evan Beaver


More like Urgh Hour

I’ve been complaining loudly this week about how ineffectual Earth Hour is and as a result how much I hate it. I despair that this massive, well organised and well funded marketing machine has set their sights on getting people to turn their light off for one hour, once a year. Anyway, this is an old hobby horse of mine, and if you want to hear more, follow this link to my TEDx talk from last year.

What can we do then? What concrete actions can we take, and could Earth Hour promote, that would contribute to de-carbonising our economy and making our lives more energy efficient?

Buy GreenPower. This commits your electricity retailer to purchasing enough renewable energy to cover your use. This is a cost and effectively subsidizes renewable electricity sources. It is additional to the mandatory renewable energy target and audited by a federal government agency. I trust it absolutely, noting GreenPower is a product, and many electricity retailers have “green” supply options, which might not all be renewables. If everyone was on GreenPower Australia’s decarbonising job would be done.

Contribute to a community renewables project or put solar on your roof. Community renewables include: Hepburn Wind, SolarShare who I volunteer with or this excellent project in Freemantle. If you want solar on your roof use an accredited installer sourced through the Clean Energy Council.

Buy more efficient appliances. Chances are if your fridge is more than ten years old you should replace it, and the energy saving will cover the cost of a new fridge in 6-10 years. You can compare the efficiency of all sorts of new appliances here and there are calculators to work out how much you can save. I encourage you to leave the sticker on these appliances, or move it to the back, so you can make comparisons later and understand how much energy different things use. The star system is an indication of how efficient a unit is compared to a standard, which is updated periodically. To get a feel for how much different appliances use, compare the kWh figure, the number printed in the middle of the sticker. As an example, our fridge uses 320kWh a year, while a big plasma TV is closer to 450.

Ride your bike more!

Make your house more efficient. I’ve got a blog post here on how to make a Canberra house more efficient, and here at the Conversation on how to control heat flows in your house.

 

 


Waste heat?

I thought this was a great piece this week by Glenn Platt on the anatomy of the Australian electricity network. I just wanted to expand on one point that I’ve been meaning to write about for a while.

“A typical coal-fired power station loses (or wastes) almost 70% of the energy that goes into it, when converting the energy in coal to electricity, and up to a further 10% is lost during the transmission and distribution stage. An old-fashioned light bulb then loses 98% of this energy to make light.”

These numbers are all of similar magnitude to what I have heard, except no one really uses incandescent lights anymore do they? What many people are surprised by in these figures is the 70% waste out of a coal fired power station. Surely there is something we can do with all that wasted energy?

The range of coal plant efficiencies in Australia is approximately 25% for the oldest plants to about 35% for the newest. The old plants could be improved with new technology, but the cost of retrofitting is so high that it is often cheaper to build a new plant. Or just keep operating the old one.

The theoretical maximum efficiency of any system that uses heat to create electricity is governed by the Carnot relationship, or even better the Chambadal-Novikov efficiency. Leaving out the maths, both of these relationships state that a conversion process is more efficient when the hot part is hotter and the cold part is colder. In a power station the hot part is the water in the coal boiler and is usually somewhere between 500 and 600 degrees Celsius. This temperature is limited by the materials available and their cost. An old unit might use copper or stainless steel, where a newer plant would be more exotic materials like titanium alloys. The material needs to be able to tolerate the 1000 degrees and more in the burning coal stream and not corrode due to the steam passing through it. When a steam tube fails it leaks steam into the boiler and once enough go there’s no point running the boiler any more. Shutting down and restarting a coal boiler is a two day job and so they don’t want tubes to fail.

The cold part is essentially ambient temperature, but power stations do a few cunning things with water to create a cold vacuum on the turbine and maintain efficiency. The huge curved concrete cooling towers we associate with power stations, both nuclear and coal, are one of the solutions to keeping water cool. This technology has generally been surpassed and newer plants favour fan forced cooling.

So the maximum heat in the steam tubes governs maximum efficiency, and materials science governs the maximum temperature.

There are however reasons beyond this that plants do not extract every last joule from their coal. Coal is essentially pure carbon, burning which gives CO2. But buried alongside the coal are other elements and compounds, some of which hinder the combustion process while others combust to give other damaging compounds. Water occurs in quite high concentrations in brown coal, as high as 60% in some places. Water, somewhat obviously, hinders the combustion process because some of the energy that should have been heating the steam pipes is actually heating the water in the coal. There are also sulphur compounds, which combust to give SO2, sulphur dioxide, one of the compounds responsible for acid rain. Acid rain forms when water and SO2 mix, and since there is water in the exhaust stream these can combine and form acid in the smoke stack, which causes big problems. To stop this happening they keep the stack temperature elevated, around 130 and above, to ensure that acid does not precipitate in their stack.

Others have regulatory restrictions placed on them which mandate minimum stack temperatures. I know of one plant whose state regulatory authority mandates an exit gas temperature above 150 degrees. This higher temperature helps the exhaust gas rise faster to be dispersed in the jet stream.

Coal plants aren’t running as efficiently as they theoretically could be, but there are good technical and economic reasons why they aren’t.

There aren’t many waste-heat opportunities in the electricity sector that haven’t been exploited to some degree. The best example of this ruthless efficiency is the combined cycle gas turbine. In this system a gas turbine, essentially a plane engine, burns gas and generates electricity. Carnot does apply here, but since the combustion is happening inside the engine the theoretical maximum efficiency is much higher. Practically though, an ‘open cycle’ gas turbine achieves somewhere around 40% efficiency. Gas turbines are mostly trying to convert kinetic energy, expanding gas, into electricity, so the gas that comes out is roaring hot. To capture this heat combined cycle gas turbines employ a steam boiler in the gas stream which also drives a turbine and creates electricity. This arrangement pushes the efficiency up to 60% and higher.

These efficiencies are possible with coal, but it’s difficult and currently cutting edge technology. In these proposed systems the coal is liquefied and sprayed into an internal combustion engine, conceptually similar to a diesel engine. In this case the hot bit is inside the cylinder, with no need to heat water, so the maximum possible efficiency is much higher, over 50% some have suggested. But this is hard to do; coal has all sorts of things in it that you would not want inside your tractor motor  and removing them costs energy.

It’s getting harder to see why anyone bothers burning the stuff at all.

 


TEDx Talk – a low energy use life is glorious

I did a TEDx Talk in Canberra recently. Here’s the video:

In this talk I wanted to get people excited about an energy efficient lifestyle. Rather than the Earth Hour view that to save the planet we need to go without I think an energy efficient lifestyle is actually pretty nice and this talk focuses on some of the co-benefits that come with energy efficiency, using some examples from my industrial career.

Let me know what you think.


The Electricity Series P3 – Charges and Accounting

Here it is, the final installation in the Electricity Series. This one is a good primer for the Bidding Orders and the NEM post.

Here I go into some of the (utterly boring, but important) methods and reasons behind how you and the rest of the grid are charged for electricity use. From this flows discussion of how renewables work in this market and how the Mandatory Renewable Energy target (MRET) is calculated.

Part 1 – The Basics is available here
Part 2 – AC/DC and The Grid is available here

Domestic Users

Electricity use for domestic users is a pretty simple affair. Almost everyone just pays a flat rate per kWh of energy used. There are also some little charges associated with billing, for connections and administration, plus the fees associated with the MRET.

The only complicator is people who choose to go to Time-Of-Use (TOU) billing or have Off-Peak power. TOU will be discussed in the industrial section further down. Off-Peak power is metered separately and is only turned on over night, using cheap electricity to heat water. There’s a long tirade in your future and mine about the evils of Off-Peak power and the baseload furphy, but I’ll spare you in the short term. Just know that if you have off-peak power you’ll have 2 separate meters, which will be charged at different rates (Off-Peak will be cheaper).

Industrial Users

This stuff is actually important in the context of the impacts of a price on carbon.

Big users are charged differently to residential users. On top of the normal charges for energy used, (Energy Costs) industrial users are also charged a premium depending on the maximum demand they have for power throughout the billing period. There are a couple of similar but different mechanisms here, which can be coarsely grouped as Network Charges. So, their bill will be *roughly* 40% Energy Costs, 40% Network Charges and up to 20% administration and levies. These include some charges to keep the network operator in business and some money to cover their MRET contribution.

Energy Costs for a business are based on the time that the energy is used; ‘peak period’ varies between network operators, but is usually an 8 or 9 hour period essentially during business hours. This is the highest energy rate, somwehere in the order of 20c/kWh. Two hours before and after peak period is the shoulder period, where energy rates are somewhere around 15c/kWh. The rest of the time is off-peak where rates fall to about 10c/kWh. Weekends are off peak the whole way through.

Network charges are the fees associated with sizing the network to meet energy users needs. The theory is this; if you have a plant that runs all day at a constant rate (say 20MW) the network only needs to be sized to 20MW (plus a little safety factor). But, if you run at 20MW all day, but peak to 50MW for a half hour period, well then, even though you only use it a little bit, the network provider needs to build the network to meet your 50MW demand.

The way this charge is actually calculated is based on an energy user’s maximum demand during any 15 minute period, during peak hour. This is charged in cents per kW demand, times the number of days in a month (because it’s charged monthly).

Why this is Important – Carbon Costs

So, you can see from the above, that the cost of the actual energy used only makes up about half of the cost of electricity supply to a business. If (likely, when) a price on carbon is introduced, this will only affect the cost of energy; it will not affect the cost of building and maintaining a network.

As an example then, consider a coal fired power plant. These plants produce roughly 1 kg of CO2 per kWh electricity consumed from the grid. If you’re keen, have a look here, on page 218 to see how this factor varies between States.

1kg/kWh is the same as 1 tonne per MWh (multiply them both by 1000). So, for peak power, 20c/kWh is $200/MWh. From this you can tell that 1 MWh makes 1 tonne of CO2 and costs about $200.

Now, add a price on carbon to that. Garnaut called for about $20 a tonne, other numbers put it as high as $40 a tonne. Lets go crazy and call it $50 a tonne. So, your MWh of electricity goes from costing $200 to $250.

A 25% increase.

But, since energy costs are only half of big energy users bills, $50 a tonne carbon price will only increase their bills by half of 25%; 12.5%.

All this crap about electricity prices going through the roof are the worst kind of uneducated speculation and fear mongering. If you see ANYONE talking about how a carbon price will double the cost of power, tell them they’re wrong and direct them here. It’s embarrassing how few smart people, who should know better, get this wrong. Is it cynical of me to think that some of the people that should know better actually do, and they’re being intentionally ignorant to try and score cheap points?

For comparison, have a read of this. This year Energy Australia began upgrading the network in Sydney. This will change nothing for consumers; it is a safety and reliability upgrade. No carbon reduction, no renewables, just network hardware. $18 billion, divided between consumers is ‘roughly $2 a week’. Make it $100 a year, on an average bill of say $1000 a year; 10% increase. This sort of upgrade happens infrequently, say every 3 years and that price increase is almost exactly in line with inflation. A carbon price will only come in once as a step change. After 4 years you can be pretty sure that increase would have happened anyway.

How Renewables and Greenpower get involved

From Part 2 I hope I made it pretty clear that managing the network is insanely complex. The network operator monitors in very short bursts what the frequency of the grid is and brings in and boots generators and loads as need be to maintain that frequency.

The need to switch generators on and off means that electricity from generators that can despatch instantly is worth a hell of a lot more than generators that take a day or so to warm up (like a big coal plant). So, rather than keeping a record of how much of each type of electricity each user consumes, they use retailers as intermediaries. For big users they will negotiate a price per kWh for the year and the retailer assumes the risk that it might be more than that. Retailers deal with wholesalers and even some generators to purchase the required energy as cheaply as possible. This happens in real time through the network operator who determines which generators are on and so the cost of energy from moment to moment.

The actual system is considerably more complex than that, but this level of detail is sufficient for the moment.

Currently the major mechanism supporting renewables in Australia is the Large Renewable Energy Target (or LRET, formerly the Mandatory RET). This sets a baseline for what percentage of their yearly energy use retailers must purchase from renewables. Currently it’s about 10% and will rise in a straight line to 20% in 2020. So at the moment, retailers need to purchase Renewable Energy Certificates (REC), (each worth 1 MWh) from generators to the value of 10% of the energy they sold. This cost is spread across consumers and is part of your bill. This is a ‘cross subsidy’ purportedly worth about $18B over the life of the program.

So, whether you like it or not, 10% of your power is currently sourced from renewables.

Now, I’ve been asked, a few times now, how Greenpower works in this market, and I finally understand it. The question was, if Greenpower subscriptions are greater than the LRET target for that year, does it make a difference?

I can finally answer a resounding ‘Yes’.

Noted above is the fact that the LRET requires retailers to source 10% of their energy from renewables. Greenpower is a retailer who voluntarily buy 100% of their energy from renewables. So, all retailers need to buy 10%; Greenpower buys 100%; the 90% above the LRET will be over and above the LRET for the country. So, I can honestly say, if EVERYONE was on Greenpower, our carbon emissions would drop ridiculously.

Domestic Generation

Lastly, how does the rise in domestic solar influence this equation?

There are a couple of points to consider here.

First is the interaction of domestic renewables with the LRET, then how domestic generation lowers emissions.

Recent changes to the LRET laws split domestic generation out into a separate system called the SRES (Small RE Scheme). What this means is that any certificates generated by small installations will not count towards the 20% target. So, any domestic generation will be over and above the LRET. This is good.

However, there are conundra for conscientious home generators. To be able to afford the system, a lot of people sell their future RECs to a retailer. This means that the renewable part of their electricity has already been sold and they are effectively using grid power for all their energy, because someone else is using their renewable component. To fix this (we’ve got panels on the roof) I just buy Greenpower. So, we’re contributing to the renewable % in Australia and managing our own emissions. This personal Greenwash costs us about an extra 25% on our energy costs.

Summing Up – Finally I hear you say

It’s been a rollercoaster ride, but the formal part of the Electricity Series is over. Hopefully now you know how energy is measured and moved around and why Nikola Tesla is a genius. I’m not promising this will be the last time I blog about electricity, but this is definitely the last post of this arc.

For your reference here’s a link to Part 1 – The Basics

and here’s Part 2 – AC/DC and the Grid

Questions, clarifications and cock-ups cheerfully accepted.

Until next time.

EB